Page 155 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes elements as profits, customs duties and taxes, transport and insurance, and other expenses incurred
in the country of importation.

Computed Value

The computed value is determined by adding to the cost of producing the goods being valued
“an amount for profit and general expenses equal to that usually reflected in sales of goods of
the same class or kind as the goods being valued which are made by producers in the country of
exportation for export to the country of importation.”
Fall-back method

Where customs value cannot be determined by any of the four methods described above, it can
be determined by using any of the previous methods in a flexible manner, provided that the
criteria employed are consistent with Article VII of the General Agreement. The value so fixed
should not, however, be based on the following factors, among others:
 The price of goods for export to a third country market,
 Minimum customs values,
 Arbitrary or fictitious values.
As a general rule, the Agreement visualizes that where a transaction value is not accepted, the
value should be determined by using the above standards on the basis of the information
available within the country of importation. However, it recognizes that in order to determine
a computed value, it may be necessary to examine the costs of producing the goods being valued
and other information which has to be obtained from outside the country of importation. The
Agreement therefore suggests, in order to ensure that the importer is not subjected to unnecessary
burdens, that the computed value standard should be used only when buyer and seller are
related and the producer is prepared to provide to the customs authorities in the importing
country the necessary cost data and facilities for their subsequent verification.

Notes The computed value is determined by adding to the cost of producing the goods
being valued “an amount for profit and general expenses equal to that usually reflected in
sales of goods of the same class or kind as the goods being valued which are made by
producers in the country of exportation for export to the country of importation.”

Self Assessment

Fill in the blanks:

5. Where value cannot be determined on the basis of the transaction value, it should be
established by using an already determined transaction value for .......................... goods.
6. As a general rule, the Agreement visualizes that where a transaction value is not accepted,
the value should be determined by using the above standards on the basis of the
information available within the country of ....................................
7. Where it is not possible to determine value on the basis of the above method, it should be
determined on the basis of the transaction value of ......................... goods.
8. Where customs value cannot be determined by any of the four methods described above,
it can be determined by using any of the previous methods in a flexible manner, provided

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